The code of conduct and operational regulations covering Registrars to an Issue and that of Share Transfer Agents are covered under

1. Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Rules, 1993

2. Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

The Rules defines a Registrar to an Issue as under:-

"Registrar to an Issue" means the person appointed by a body corporate or any person or group of persons to carry on the following

1. collecting applications from investors in respect of an issue;

2. keeping a proper record of applications and monies received from investors or paid to the seller of the securities. and

3. assisting body corporate or person or group of persons in-

   1. determining the basis of allotment of securities in consultation with the stock exchange;

   2. finalising of the list of persons entitled to allotment of securities;

   3. processing and despatching allotment letters, refund orders or certificates and other related documents in respect of the issue.

The term "Share Transfer Agent" is defined as under:-

"Share Transfer Agent" means-

1. any person, who on behalf of any body corporate maintains the record of holders of securities issued by such body corporate and deals with all matters connected with the transfer and redemption of its securities.

2. a department or division (by whatever name called) of a body corporate performing the activities referred in sub-clause (i) if, at any time the total number of the holders of securities issued exceed one lakh.

The definition of term "Issue" is given as under:-

"Issue" means an offer of sale or purchase of securities by any body corporate or by any other person or group of persons on its or his or their behalf, as the case may be, to or from, the public, or, the holders of securities of such body corporate or person or group of persons.

As per Rule 3 - No person shall act either as a registrar to an issue or as a share transfer agent unless he holds a certificate granted by the Board under the regulations

(1) The Board may grant or renew a certificate to a registrar to an issue or a share transfer agent subject to the following conditions namely;

1. in case of any change in the status and constitution, it or he shall obtain prior permission of the Board to continue to act as registrar to an issue or share transfer agent;

2. without prejudice to the obligations under any other law the registrar to an issue or share transfer agent, shall enter into a valid agreement with the body corporate or the person or group of persons for or on whose behalf he is buying or selling or dealing in securities as a registrar to an issue or as a transfer agent and the said agreement amongst other things may define the allocation of duties and responsibilities between him and such body corporate or persons or group of persons, as the case may be;

3. he pays the amount of fees for registration in the manner provided in the regulations;

4. he maintains capital adequacy requirements specified in the regulations at all times during the period of the certificate or renewal thereof;

5. he shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaints and he shall keep the Board informed about the number, nature and other particulars of the complaints received and the manner in which such complaints have been redressed.

1. An applicationto SEBI by a registrar to an issue or a share transfer agent for grant of a certificate shall be made to the Board in Form A as provided in the Schedules to the Regulations
   [Regulation 3 (1)]

2. The application under sub- regulation (1) may be made for any of the following categories, namely :-

   1. Category I : to carry on the activities as a registrar to an issue and share transfer agent;

   2. Category II : to carry on the activity either as a registrar to an issue or as a share transfer agent;

The Board shall take into account for considering the grant of a certificate all matters which are relevant to the activities and in particular the following, namely, whether the applicant-

1. has the necessary infrastructure like adequate office space, equipments and man- power to effectively discharge his activities;

2. has any past experience in the activities;

3. or any person directly or indirectly connected with him has not been granted registration by the Board under the Act;

4. fulfils the capital adequacy requirement specified in regulation 7;

5. is subjected to any disciplinary proceedings under the Act;

6. or any of its director, partner or principal officer is or has at any time been convicted for any offence involving moral turpitude or has been found guilty of any economic offence.

7. is a fit and proper person

1. The capital adequacy requirement referred to in clause (d) of regulation 6 shall not be less than the net worth of the applicant specified in sub- regulation (2).

2. For the purposes of sub- regulation (1), the networth of the applicant shall be as follows, namely:

   1. Category I specified in clause (a) of sub-regulation (2) of regulation 3, - Rs.6,00,000 lacs;

   2. Category II specified in clause (b) of sub-regulation (2) of regulation 3, - Rs. 3,00,000 lacs

       Provided that the capital adequacy requirement shall not be applicable for a department or division of a body corporate performing activities referred to in sub-clause (i) of clause (g) of regulation 2.

3. In sub-regulation (2) the "networth" means -

   1. in the case of an applicant being a proprietary concern or a firm or an association of persons or any body of individuals, the value of capital contributed to such business by the applicant and the free reserves of any kind belonging to the business of the applicant, and

   2. in the case of a body corporate, the value of the paid up capital and the free reserves as disclosed in the books of accounts of the applicant at the time of making the application under sub-regulation (1) of regulation 3.

Every applicant eligible for grant or renewal of a certificate shall pay such fees in such manner and within the period specified in Schedule II: (Regulation 12)

1. Every registrar to an issue and share transfer agent holding a certificate shall at all times abide by the Code of Conduct as specified in Schedule III.

2. No registrar to an issue shall act as such registrar for any issue of securities in case he or it is an associate of the body corporate issuing the securities (Regulation 13A).

   Explanation: For the purpose of this regulation, a registrar to an issue or the body corporate as the case may be shall be deemed to be an associate of the other where

   1. he or it controls directly or indirectly not less than 10 percent of the voting power of the body corporate or of the registrar to an issue, as the case may be; or,

   2. he or any of his relative is a director of the body corporate or of the registrar to an issue, as the case may be

3. To maintain proper books of accounts and records, etc. (Regulation 14)

   1. ) Every registrar to an issue and share transfer agent being a body corporate shall keep and maintain the following books of accounts and documents in respect of three preceding financial years, namely:-

      1. in relation to registrar to an issue and share transfer agent being a body corporate

         1. a copy of balance sheet and profit and loss account as specified in sections 211 and 212 of the Companies Act, 1956 (1 of 1956);

         2. a copy of the auditor's report referred to in section 227 of the Companies Act, 1956 (1 of 1956);

         3. a statement of capital adequacy requirements for each quarter.

      2. in relation to registrar to an issue and share transfer agent not being a body corporate -

         1. all sums of money received and expended by them and the matters in respect of which the receipt and expenditure take place;

         2. their assets and liabilities; and

         3. a statement of capital adequacy requirements for each quarter.

   2. ) Every registrar to an issue shall also maintain the following records with respect to:-

      1. all the applications received from investors in respect of an issue;

      2. all applications of investors rejected and reasons therefor;

      3. basis of allotment of securities to the investors as finalised in consultation with the stock exchange;

      4. terms and conditions of purchase of securities;

      5. allotment of securities;

      6. list of names of allottees and non-allottees of the securities;

      7. refund orders despatched to investors in respect of application monies received from them in response to an issue;

      8. such other records as may be specified by the Board for carrying on the activities as registrars to an issue.

   3. ) Every share transfer agent shall maintain the following records in respect of a body corporate on whose behalf he is carrying on the activities as share transfer agent namely:-

      1. list of holders of securities of such body corporate;

      2. the names of transferor and transferee and the dates of transfer of securities;

      3. such other records as may be specified by the Board for carrying out the

   4. ) Every registrar to an issue or share transfer agent shall intimate the Board the place where the books of accounts, records and documents are maintained.

   5. ) Without prejudice to sub- regulation (1), every registrar to an issue and share transfer agent shall, after the close of each financial year as soon as possible but not later than six months from the close of the said period furnish to the Board if so required copies of the balance sheet, profit and loss account, statement of capital adequacy requirement and such other documents as may be required by the Board under regulation 14.

1. Every registrar to an issue and share transfer agent shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc. issued by the Board or the Central Government and for redressal of investors' grievances.

2. the compliance officer shall immediately and independently report to the Board any non-compliance observed by him.

1. Board's Power & Procedure for Inspection - As per Chapter IV of the Regulations

2. Procedure for Action in Case Of Default - As per Chapter- V of the Regulations

1. A registrar to issue and share transfer agent shall maintain high standards of integrity and fairness in all their dealings with their clients and other registrars to issue and share transfer agents in the conduct of their business.

2. A registrar to issue and share transfer agent shall act with due skill, diligence and care in the conduct of all their activities.

3. A registrar to issue and share transfer agent shall not indulge in unfair competition, which is likely to be harmful to the interests of other registrars to issue and share transfer agents or is likely to place such other registrars to issue and share transfer agents in a disadvantageous position in relation to the registrar to issue and share transfer agent, while completing for or executing any assignment.

4. A registrar to issue and share transfer agent shall not make any exaggerated statement, whether oral or written , to the clients either about their qualifications or capability to render certain services or their achievements in regard to services rendered to other clients.

5. A registrar to issue and share transfer agent shall not divulge to other clients, press or any other party any confidential information about their clients, which have come their knowledge.

6. A registrar to issue and share transfer agent shall endeavour to ensure that-

   1. inquiries from investors are adequately dealt with.

   2. Adequate steps are taken for proper allotment of securities and refund of application monies without delay as per the law.

7. A registrar to issue and share transfer agent shall not generally and particularly in respect of any dealings in securities be party to -

   1. creation of false market;

   2. price rigging or manipulation;

   3. passing of unpublished price sensitive information to brokers, members of the stock exchanges and other intermediaries in the securities market or take any other action which is not in the interest of the investors.

   4. no registrar to issue and share transfer agent or any of its directors, partners or manager having the management of the whole or substantially the whole of affairs of their business shall either or their respective accounts or through their associates or family members, relatives or friends indulge in any insider trading.

8. (a) A registrar to issue and share transfer agent or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real-time or non real-time unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.

8. (b) In case, an employee of the registrar to issue and share transfer agent is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice.